Methionine and norleucine, compounds which stimulate production of penicillin N and cephalosporin C in Cephalosporium acremonium, increase the specific activity of the ring formation and the ring expansion enzymes when added to the growth medium. They do not stimulate either cell-free reaction; thus they behave as inducers. Cycloheximide, when added to resting cells, inhibits formation of cephalosporin C but not that of penicillin N. This is presumably due to turnover of the labile ring expansion enzyme. In complete fermentations, a low concentration (2.1%) of glucose and glycerol have a positive effect on penicillin N formation and a negative effect on cephalosporin C production. A high concentration (6.3%) interfers with formation of both antibiotics. In resting cells, high glucose or glycerol inhibits penicillin N and cephalosporin C production; the latter is the more sensitive process. Cell-free ring formation or ring-expansion reactions are not inhibited by the carbon sources. Repession is now being examined as a possible mechanism.